Medicare move could be chaotic

Medical supplier changes may confuse seniors

May 23, 2008|BY BOB LaMENDOLA STAFF WRITER

A Medicare plan to slash about 30 percent off the price of home medical goods - including oxygen, diabetes supplies and walkers - also may baffle some seniors and temporarily disrupt their care, consumer advocates and suppliers said.

Some patients may have to switch brands of medical products or stop buying from their regular suppliers when the new system starts July 1, critics said after new details of the plan came out this week. Also, hundreds of longtime suppliers may be forced to close.

"There will be some chaos initially," said Alfred Chiplin, an attorney at the nonprofit Center for Medicare Advocacy policy group. "The people who use these items are often in crisis. They don't need chaos."

Federal officials are cutting the cost of 10 common items of durable medical equipment by making companies bid for the right to sell to Medicare recipients. Consumers would share the savings through lower co-payments.

Congress ordered the new system to start in 10 regions, including South Florida, to end years of excess prices for durable equipment and to crack down on rampant fraudulent billing, notably in South Florida. Once extended nationwide after 2009, the new system would slice $1 billion from the $8.5 billion spent yearly on the durable medical items.

This week, Medicare named the suppliers that won bids, including 80 in South Florida out of 800 that operate here. All 800,000 Medicare recipients in the area will get letters explaining the new system so they can line up new companies if necessary, Medicare Administrator Kerry Weems said.

"This is in plenty of time so they can make plans for acquiring their medical supplies," Weems said. "We're going to be on the ground" to help with the transition.

But the durable medical equipment industry has been lobbying Congress for a year trying to overturn the new system, saying:

The quality of durable medical supplies will fall if bid winners substitute cheaper goods to meet the lower bid prices. For example, diabetics may have to switch blood-testing devices.

Suppliers will cut service to make ends meet. For example, oxygen firms may deliver monthly instead of weekly.

Not enough suppliers will remain in the business, undercutting the goal of increased competition. For example, 46 firms will supply about 200,000 who use home oxygen.

"What happens if we have a hurricane, if half the companies can't do anything?" said Rob Brant, a Davie co-owner of an oxygen firm and president of the Accredited Medical Equipment Providers of America.

Peter Thomas, of the Consortium for Citizens with Disabilities, urged a congressional panel to kill Medicare's "massive experiment [in which] individuals with disabilities and chronic conditions are the unwitting participants."

Of the 80 winning firms in South Florida, 18 are not even in the state. One in Niagara Falls, N.Y., has no required Florida license. A national wheelchair firm won six contracts here, including for home hospital beds and wound healing devices.

"They gave bid awards to big companies out of state who don't even do the line of work they got contracts to perform," said Lou Toscano, president of Medical Supply Depot in Delray Beach.

Ninety percent of existing suppliers did not win bids. Half were disqualified because of missing paperwork, including Toscano and Brant, who said Medicare lost forms from hundreds of companies. Without a contract, Brant said he may close his business of 11 years.

But Medicare argues the new system has shined during lengthy test runs. The nonpartisan Government Accountability Office agreed, reporting last month that patients had few problems with poor-quality products, bad service or lack of access to suppliers. Likewise, the AARP heard no complaints and supports the new system, said Kirsten Sloan, director of federal health.

Medicare's Weems said fears about too few winning bidders are unfounded, because many have multiple offices in a region and may be able to subcontract with local companies if needed.

Patient advocate Chiplin does not expect as many problems as suppliers predict and said the new system can work - if managed well.

"This is Medicare," he said, "people need to watch it carefully."

Bob LaMendola can be reached at blamendola@sun-sentinel.com or 954-356-4526 or 561-243-6600, ext. 4526.

INFORMATIONAL BOX:

MEDICARE SAVINGS ON DURABLE MEDICAL EQUIPMENT

Medicare and its patients will save 20 to 40 percent on durable medical equipment in South Florida, under a new bidding system for suppliers.